Honeywell’s first quarter saw a positive market reaction as the company delivered revenue and non-GAAP profit above Wall Street expectations. Management attributed the performance to strong demand in aerospace, particularly in commercial aftermarket and defense, alongside steady execution in building automation. CEO Vimal Kapur highlighted the company’s resilience, noting, “Our results demonstrate tremendous effort from our commercial teams, successful productivity initiatives, and excellent supply chain coordination with our partners in a rapidly changing marketplace.” The quarter also saw robust order growth and progress on integrating recent acquisitions, offsetting weaker trends in industrial automation and energy and sustainability solutions.
Is now the time to buy HON? Find out in our full research report (it’s free).
Honeywell (HON) Q1 CY2025 Highlights:
- Revenue: $9.82 billion vs analyst estimates of $9.59 billion (7.9% year-on-year growth, 2.5% beat)
- Adjusted EPS: $2.51 vs analyst estimates of $2.21 (13.6% beat)
- Adjusted EBITDA: $2.68 billion vs analyst estimates of $2.39 billion (27.3% margin, 12.1% beat)
- The company reconfirmed its revenue guidance for the full year of $40.05 billion at the midpoint
- Management slightly raised its full-year Adjusted EPS guidance to $10.35 at the midpoint
- Operating Margin: 22.1%, in line with the same quarter last year
- Organic Revenue rose 4% year on year (2.7% in the same quarter last year)
- Market Capitalization: $142.5 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Honeywell’s Q1 Earnings Call
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Nigel Coe (Wolfe Research) asked about the $500 million tariff impact and mitigation strategies. CEO Vimal Kapur emphasized a combination of local-for-local production, pricing, and direct material productivity to offset tariff costs, noting confidence in these countermeasures.
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Steve Tusa (J.P. Morgan) inquired about volume and price assumptions within the guidance. CFO Mike Stepniak clarified that guidance assumes about 3% price and a volume range of minus 2% to plus 1%, reflecting a conservative stance amid macro uncertainty.
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Julian Mitchell (Barclays) questioned the industrial automation segment’s outlook and margin recovery. Kapur pointed to receivables write-offs as a short-term drag, with margin improvement expected as the PPE business is divested and productivity actions take hold.
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Andrew Obin (Bank of America) probed supply chain risks from China trade disruptions. Kapur responded that Honeywell does not foresee component shortages at this time and is primarily factoring in tariff costs and potential demand reduction, not supply constraints.
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Amit Mehrotra (UBS) asked about the separation timeline and aerospace margin trajectory. Kapur reiterated that the advanced materials spin is on track for late 2025 or early 2026, and aerospace margins should remain stable, with temporary integration costs offset by future expansion opportunities.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will monitor (1) execution of Honeywell’s separation into three businesses and associated cost management, (2) progress on mitigating tariff impacts and adapting to global trade policy changes, and (3) sustained demand and backlog conversion in core segments like aerospace and building automation. The pace of portfolio reshaping, especially the Sundyne acquisition and PPE divestiture, will also be key indicators of strategic execution.
Honeywell currently trades at $222.25, up from $200.54 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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